Living progress

About supply chain responsibility

Combatting forced laborFirst in the IT industry to require direct employment of foreign migrant workers in our supply chain.Learn more

HP has one of the industry's most extensive supply chains, spanning six continents, more than 45
countries and territories, and many cultures. Our efforts to support human, economic, and environmental
progress goes far beyond our own walls; since 2007, our work to build suppliers’ capacity to address
sustainability issues have directly reached over 460,000 people and established ongoing supplier- and
peer educator-run programs, impacting a much larger number of workers.

Building a sustainable supply chain

Our Supply Chain Responsibility (SCR) program—founded in 2001—is fundamental to HP Living Progress, the
way our people and technology come together to solve society’s toughest challenges. Our supply chain
standards enhance the lives of people making our products and reduce environmental impacts across our
value chain. They also lead to higher quality products and help us secure our supply lines.

The SCR program covers a wide range of issues including minimizing labor impacts in supplier factories,
sourcing minerals responsibly, employing a diverse range of suppliers, and addressing climate change.
Read more on our approach.

Combatting forced labor

HP is committed to ensuring fair, safe and voluntary work for every worker in our supply chain. To further prevent exploitative labor practices and forced labor, HP became the first company in the IT industry to require direct employment of foreign migrant workers in its supply chain through the release of the HP Foreign Migrant Worker Standard. The industry-leading standard combines this direct employment requirement with rights relating to worker retention of passports and personal documentation and the elimination of worker-paid recruitment fees.

The standard was developed in consultation with Verité, an international nonprofit that promotes safe, fair, and legal working conditions. Verité Chief Executive Officer Dan Viederman explained why the standard is vital to protecting foreign migrant workers, “Verité’s focused assessments and independent research confirm that workers who are employed by labor agents are more at risk of forced labor than those employed directly. HP’s standard requiring direct hiring will remove a key obstacle to ethical treatment of migrant workers. The standard sets a new bar and will likely result in substantial financial benefit to foreign migrant workers in HP’s supply chain, and we hope other companies will adopt similar policies.”

The standard builds on existing efforts to educate suppliers on best practices and is a part of HP’s Supplier Code of Conduct, which already expressly forbids any forced, bonded, indentured, involuntary prison labor, slavery or trafficking of persons. To ensure implementation of this standard, HP will complement its existing Supply Chain Responsibility program with specialized forced labor audits and regular monitoring. Suppliers that do not meet the standard will be required to correct their practices with urgency and may be subject to internal HP escalations, remediation programs and risk discontinuation of business with HP.

Tracking our progress: supply chain responsibility dashboard

In 2013, we made progress across several supply chain focus areas. We became the first IT company to
introduce guidance for the responsible management of student and dispatch workers, an emerging challenge
in the electronics industry supply chain. We published a complete list of the tantalum, tin, tungsten,
and gold (3TG) smelters confirmed in our supply chain - a major step toward responsibly sourcing
minerals for our products. We significantly increased the influence of SER in our purchasing decisions,
and we launched a GHG emissions reduction goal for key suppliers (see Supply Chain Environmental Impact).

In 2013, HP introduced a more robust social and environmental responsibility (SER)
procurement scorecard, placing greater emphasis on SER performance in the business award process.
Suppliers with strong SER performance can now improve their overall scorecard results, which increase
their opportunities for new or expanded business. Suppliers with persistently poor SER performance may
see a reduction in their scorecard rating and a decrease in the business they are awarded.Read more

This is our latest in a long line of SCR milestones (see below) as we build a sustainable supply
chain.

1993

2004

Electronic Industry Citizenship Coalition (EICC) formed

Cross industry; global

The EICC fosters responsible management and operational practices
in labor, human rights, ethics, the environment, and health and safety across the
electronics industry's global supply chain.
HP was one of the founding members of the EICC and codeveloped the EICC Code of Conduct. HP
has supplemented the EICC Code with additional requirements specific to freedom of
association. See HP's EICC Code of Conduct

HP's first supplier audit performed

HP; China, Mexico, Southeast Asia, and Eastern Europe

We completed 45 pilot audits in 2004, against a public goal to
complete 30 during the year.

1998

HP's environmental procurement policy and General Specification for the
Environment (GSE) released

HP; global

We communicate materials restrictions to our design teams and to
our manufacturing suppliers through our GSE.

2005

HP's first supplier SER forum held in China

HP; China

HP held the first SER forum for regional Chinese suppliers to
review and discuss HP's SER and Restriction of Hazardous Substances requirements. Around 330
representatives from various suppliers participated.

2000

Supply chain SER program launched

HP; global

We launched our supply chain SER program with a long-term vision
to help improve supplier labor management standards, human rights, and environmental
performance.

2006

Capability building program launched

HP; global

HP's capability building program commenced with the Focused
Improvement Supplier Initiative, a program that provided 30 HP suppliers with the tools and
resources to improve SER management within their facilities. Since then, our initiatives
have covered multiple issues, including worker health, communication, environment and
antidiscrimination. (See Capability building.)

2002

HP's first Global Citizenship Report published

HP; global

HP's first Global Citizenship Report outlined our commitment to improving social and
environmental performance over the next decade.

HP Supplier Code of Conduct rolled out

HP; global

HP was the first electronics company to publish an SER Supplier
Code of Conduct.

2007

Health and safety capability building efforts launched

Multistakeholder; Mexico

HP joined the HERProject to raise awareness of the general and
reproductive health needs of women working in manufacturing. (See Capability building.)

Kicked off capability building efforts focused on raising SER awareness
through direct training of supplier

Multistakeholder; China

HP piloted a training program to directly train supplier
employees in worker-management communications. The program helped workers better understand
their labor rights and provided an independent workers' grievance hotline for communicating
concerns about their working environment.

2008

Comprehensive list of HP suppliers disclosed

Suppliers' greenhouse gas (GHG) emissions reported

HP; global

HP became the first major IT company to publish its aggregated
supply chain GHG emissions, representing 86% of our first-tier suppliers by spend. We
increased that percentage to 95% for calendar year 2010.

2009

Working hours key performance indicators (KPIs) program launched

HP; China

HP piloted supplier use of KPIs to help reduce excessive working
hours in the supply chain.

First capability building program to reach multiple tiers of HP's supply
chain

Multistakeholder; Thailand

HP's year-long program with hard disk drive suppliers in Thailand
was the company's first effort to reach multiple tiers of our supply chain. The program
raised awareness of HP's EICC Code of Conduct, facilitated best practice sharing among
supplier management, and supported their implementation of SER-related management
systems.

Supply chain SER program expanded to nonproduction suppliers

HP; global

Originally focused only on production suppliers, HP's supply
chain SER program expanded to also include nonproduction suppliers.

Conflict minerals program launched

HP; Africa

HP's conflict minerals program was launched, broadening the scope
of our work to focus on tantalum, tin, tungsten, and gold mined in the Democratic Republic
of Congo.

2010

First joint Validated Audit Process (VAP) audits performed

Cross industry; global

The VAP is designed to eliminate duplication and "audit fatigue"
by providing a common auditing approach for companies in the electronics industry. This
allows for audit results to be shared by multiple customers of one supplier.

Environmental sustainability capability building efforts kicked off

Multistakeholder; China

HP became the only information and communication technology
company to join Energy Efficiency Partnership (EEP), a year-long pilot program designed to
help major suppliers in China reduce energy use, GHG emissions, and costs. Through the EEP,
HP expanded supplier capability building efforts to environmental improvement.

2011

First HP nonproduction supplier audit performed

HP; China, Asia Pacific, North America

HP performed our first audits of nonproduction suppliers,
auditing three facilities in China, India, and Mexico.

2012

Supplier guidance on appropriate use of student and dispatch workers
developed

HP; China

In response to the growing focus on student labor management
violations in the electronics industry supply chain, we developed “HP Student and Dispatch
Worker Guidance Standard for Supplier Facilities in the People’s Republic of China (PRC)”,
an industry-leading initiative.

First independent management system assessments of HP supplier facilities
conducted

HP; China, Europe, Latin America

HP commissioned labor rights NGO Social Accountability
International (SAI) to use its Social Fingerprint tool to independently assess the social
management systems of three key production suppliers from China, Europe, and Latin
America.

*HP calculates intensity as its suppliers’ GHG emissions divided by HP’s annual revenue. This method normalizes performance based on business productivity.

First IT company to publish a complete list of 3TG smelters

HP; global

HP published the list of smelters in our supply chain to drive awareness and create a call to action for all users of these metals. See HP’s list of smelters

New SER scorecard for stronger influence on purchasing decisions developed

HP; global

HP introduced a more robust SER procurement scorecard, placing greater emphasis on SER performance in the business award process. Suppliers with strong SER performance can now increase their overall scorecard results, which increases their opportunities for new or expanded business. Suppliers with persistently poor SER performance may see a reduction in their scorecard rating and a decrease in the business they are awarded. See Supply chain responsibility, incentivizing suppliers

Supplier diversity

For more than 40 years, we have provided diverse companies with an equal opportunity to compete for our
business. These businesses bring innovation to our supply chain, helping us gain a competitive
advantage.

Our Global Supplier Diversity program mentors suppliers to boost their capacity and capabilities. In
2013, we expanded supplier diversity programs in Australia, Canada, China, India, Ireland, and the UK.
We also met our goal to increase the number of our strategic suppliers reporting their own diverse
spending by 10% over 2012 levels.

We encourage suppliers in these categories to work with us:

Aboriginal/indigenous-owned businesses

Businesses located in historically underutilized commercial and industrial zones

1This table includes both company-level and facility-specific data obtained during 2013 relating to HP’s first-tier
production suppliers. Findings from our 2013 audits are limited to those facilities audited during the year and are not
representative of all facilities in our supply chain.

2Based on production-line workers at final assembly sites participating in the HP KPI program in 2013 and audit results.
We continue to expand the list of suppliers in the KPI program based on business risk, country risk, and identified
nonconformances.